An Attractive High-Yield Dividend ETF for Income Seekers

Looking ahead, Fidelity Investments anticipates growing regulatory relief, especially under the Trump administration, to bolster bank earnings and strengthen the financial sector.

“Estimates are that big banks with more than $50 billion in assets—which have seen a disproportionate share of the incremental regulations—could be among the biggest beneficiaries, with an estimated 5% to 15% boost in earnings. Regional banks, which have tried not to exceed the onerous $50 billion threshold, could become more interested in mergers and acquisitions (M&A), and investment banks could benefit from increased trading activity,” Christopher Lee, Sector Portfolio Manager for Fidelity Investments, said in a note.

Meanwhile, innovative technologies and further developments, such as 3D-sensoring smartphone applications and more, may continue to support the information technology segment.

“I see Apple as a driver of innovation, but I believe investments in certain component manufacturers may offer compelling growth opportunities going forward,” Charlie Chai, Sector Portfolio Manager for Fidelity Investments, said in a note. “These are the companies that make the camera lenses, sensors, speakers, illuminators, microphones and other products required for smartphone operation, and the use of features such as 3D sensing. I believe the best-positioned component makers represent attractive investment opportunities in the coming year, regardless of which company ultimately wins the smartphone race.”

Along with financial and technology exposure through the dividend-focused FDVV, ETF investors may also consider sector-specific plays, such as the Fidelity MSCI Financials Index ETF (NYSEArca: FNCL) and the Fidelity MSCI Information Technology Index ETF (NYSEArca: FTEC) to access the relative market segments. FNCL shows a 1.46% 12-month yield and FTEC has a 0.92% 12-month yield.